Project Management

Project Manager

Key Decisions

 Deciding which projects to implement  Selecting a project manager  Selecting a project team  Planning and designing the project  Managing and controlling project resources  Deciding if and when a project should be terminated

Ethical Issues

PERT and CPM

PERT

: Program Evaluation and Review Technique

CPM

: Critical Path Method   Graphically displays project activities Estimates how long the project will take  Indicates most critical activities  Show where delays will not affect project  PERT and CPM have been used to plan, schedule, and control a wide variety of projects:  R&D of new products and processes  Construction of buildings and highways   Maintenance of large and complex equipment Design and installation of new systems

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PERT/CPM

 PERT/CPM  used to plan the scheduling of individual activities that make up a project.

 Projects may have as many as several thousand activities.

 Complicating factor in carrying out the activities  some activities depend on the completion of other activities before they can be started.

PERT/CPM

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 Project managers rely on PERT/CPM to help them answer questions such as:  What is the total time to complete the project?

 What are the scheduled start and finish dates for each specific activity?

 Which activities are critical?

 must be completed exactly as scheduled to keep the project on schedule?

 How long can non-critical activities be delayed  before they cause an increase in the project completion time?

Management Scientist Solution

Uncertain Activity Times

 Three-time estimate approach   the time to complete an activity assumed to follow a Beta distribution An activity’s mean completion time is:

15 t

= (

a

+ 4

m

+

b

)/6 

a

= the optimistic completion time estimate 

b

= the pessimistic completion time estimate  

m

= the most likely completion time estimate An activity’s completion time variance is  2 = ((b-a)/6) 2

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Uncertain Activity Times

 In the three-time estimate approach, the critical path is determined as if the mean times for the activities were fixed times.  The overall project completion time is assumed to have a normal distribution  with mean equal to the sum of the means along the critical path, and  variance equal to the sum of the variances along the critical path.